Bulgaria Cigarette Prices Set to Rise on Mulled Excise Hike

Source from:  news.dnevnik.bg 08/09/2007

The Bulgarian finance ministry has proposed to hike in 2008 the excise on fuels by 8% and on cigarettes by 33%, Dnevnik was told by MPs from the ruling coalition. At a cabinet meeting some 10 days ago, finance minister Plamen Oresharski reportedly presented a draft for the increase in the excise on unleaded petrol, gas oil, kerosene, coke, coal, electricity and cigarettes. The biggest excise increase is proposed for cigarettes and the lowest for car fuel. Gasoline prices are set to add 0.05 levs/l on average next year while a pack of the nation's best-selling cigarette brand, Victory, will be marked up to 3.40 levs from 2.60 levs at present. The new excise rates are expected to be approved in late August as the cabinet's current work has been sidetracked by discussions over the mulled introduction of a flat tax on personal income. The official reasoning behind the excise hike is the need to reach the minimum EU rates while taming inflationary factors in view of Sofia's bid for an eurozone entry. In 2006, Bulgaria hiked the excise on cigarettes to a level originally not expected to be reached before 2008. The move added 1 lev on average to the retail price of cigarettes. The finance ministry is now proposing to adopt upfront half the excise rate originally scheduled to kick in in 2010 and leave the other half for 2009. This means the excise will increase from the current 74.75 levs per 1,000 pieces to 100 levs per 1,000 pieces in 2008. It was not immediately clear what will be the adjustment to the two components of the excise: the rate charged per sold unit and the rate charged on the retail price. Enditem